THREE FORMER FINANCIAL SERVICES EXECUTIVES INDICTED FOR ROLES IN
FRAUD SCHEMES AND CONSPIRACIES INVOLVING INVESTMENT CONTRACTS
FOR THE PROCEEDS OF MUNICIPAL BONDS

WASHINGTON — Three former financial services executives were indicted today for
their participation in fraud schemes and conspiracies related to bidding for contracts for the
investment of municipal bond proceeds and other municipal finance contracts, the Department of
Justice announced.

The 12-count indictment was filed today in U.S. District Court in New York City. The
indictment charges Dominick P. Carollo, Steven E. Goldberg and Peter S. Grimm, all former
executives at financial service companies or financial institutions, with participating in wire
fraud schemes and separate fraud conspiracies at various time periods from as early as 1999 until
2006.

The charged conspiracies and schemes all relate to the provision of a type of contract,
known as an investment agreement, to public entities, such as state, county and local
governments and agencies throughout the United States. Major financial institutions, including
banks, investment banks, insurance companies and financial services companies, are among the
providers of investment agreements and other related municipal finance contracts. Public entities
seek to invest money from a variety of sources, primarily the proceeds of municipal bonds that
they issued to raise money for, among other things, public projects. Public entities typically hire
a broker to conduct a competitive bidding process among various providers for the award of an
investment agreement to invest such money. Competitive bidding for these agreements is the
subject of regulations issued by the U.S. Department of the Treasury and is related to the tax-exempt status of the bonds. The companies that employed Carollo, Goldberg and Grimm all
marketed financial products and services, including services as a provider of investment
agreements.

"The individuals charged today allegedly participated in complex fraud schemes and
conspiracies to manipulate what was supposed to be a competitive process," said Christine
Varney, Assistant Attorney General in charge of the Department of Justice's Antitrust Division.
"The Antitrust Division has previously indicted several individuals and their employer in this
matter. Our investigation is ongoing and we will continue to prosecute those who engage in such
illegal and anticompetitive behavior."

The indictment charges that Carollo, Goldberg and Grimm conspired with various
brokers to attempt to increase the number and profitability of investment agreements and other
municipal finance contracts awarded to the provider companies where they were employed.
According to court documents, Beverly Hills, Calif.-based Rubin/Chambers, Dunhill Insurance
Services Inc., also known as CDR Financial Products, was one of the co-conspirator brokers.
Carollo, Goldberg and Grimm obtained from CDR and other co-conspirator brokers information
about the prices, price levels or conditions in competing providers' bids, a practice known as a
"last look," which is explicitly prohibited by U.S. Treasury regulations. As a result of the
information, various providers won investment agreements and other municipal finance contracts
at artificially determined price levels. In exchange for this information, Carollo, Goldberg and
Grimm submitted intentionally losing bids for certain investment agreements and other contracts
when requested, and, on occasion, agreed to pay or arranged for kickbacks to be paid to CDR and
other co-conspirator brokers.

The indictment also alleges that Carollo, Goldberg, Grimm and co-conspirators
misrepresented to municipal issuers or bond counsel that the bidding process was in compliance
with U.S. Treasury regulations. This caused the municipal issuers to award investment
agreements and other municipal finance contracts to providers that otherwise would not have
been awarded the contracts if the issuers had true and accurate information regarding the bidding
process. Such conduct placed the tax-exempt status of the underlying bonds in jeopardy.

According to court documents, the efforts by Carollo, Goldberg, Grimm and their co-conspirators to control and manipulate the bidding for investment contracts, and the execution of
a variety of certifications that covered up their scheme, also obstructed the Internal Revenue
Service's (IRS) ability to monitor compliance with U.S. Treasury regulations and impeded the
IRS's ability to determine whether municipal issuers had correctly accounted for any money that
was owed to the U.S. Treasury.

"The elaborate schemes outlined in the indictment boil down to efforts by these
defendants to subvert the competitive bidding process for investment agreements. In the process,
they defrauded public entities - and therefore, the public - and put bondholders at risk," said FBI
Acting Assistant Director-in-Charge George Venizelos. "The FBI will continue to work with the
Antitrust Division to ensure the integrity of competitive bidding in public finance."

"This case demonstrates the value of a coordinated approach by multiple agencies and
law enforcement authorities," said IRS Special Agent in Charge Charles R. Pine. "IRS Criminal
Investigation contributed to this joint effort by providing financial investigative expertise to
uncover this complex and sophisticated scheme. Professionals, including financial service
executives, should know we will devote all resources necessary to bring to justice those who
commit financial crimes."

The fraud conspiracies with which Carollo, Goldberg and Grimm are charged each carry
a maximum penalty per count of five years in prison and a $250,000 fine. The wire fraud
charges each carry a maximum penalty per count of 20 years in prison and a $1 million fine.
Goldberg is charged with eight counts of conspiracy and two counts of wire fraud, Grimm is
charged with five counts of conspiracy and one count of wire fraud, and Carollo is charged with
four counts of conspiracy and one count of wire fraud. The maximum fines for each of these
offenses may be increased to twice the gain derived from the crime or twice the loss suffered by
the victims of the crime, if either of those amounts is greater than the statutory maximum fine.

The charges announced today resulted from an ongoing investigation conducted by the
Antitrust Division's New York Field Office, the FBI and IRS Criminal Investigation. The
division is coordinating its investigation with the U.S. Securities and Exchange Commission, the
Office of the Comptroller of the Currency and the Federal Reserve Bank of New York. To date,
four individuals have pleaded guilty in relation to this investigation. In addition, on Oct. 29,
2009, CDR, two of its employees and one former employee were indicted and charged with
participating in bid-rigging and fraud conspiracies and related crimes. The CDR trial is
scheduled to begin on Sept. 12, 2011.

Today's charges are part of efforts underway by President Barack Obama's Financial
Fraud Enforcement Task Force. President Obama established the interagency Financial Fraud
Enforcement Task Force to wage an aggressive, coordinated and proactive effort to investigate
and prosecute financial crimes. The task force includes representatives from a broad range of
federal agencies, regulatory authorities, inspectors general and state and local law enforcement
who, working together, bring to bear a powerful array of criminal and civil enforcement
resources. The task force is working to improve efforts across the federal executive branch, and
with state and local partners, to investigate and prosecute significant financial crimes, ensure just
and effective punishment for those who perpetrate financial crimes, combat discrimination in the
lending and financial markets, and recover proceeds for victims of financial crimes. For more
information on the task force, visit www.StopFraud.gov.

Anyone with information concerning bid rigging and related offenses in any financial
markets should contact the Antitrust Division's New York Field Office at 212-264-0390 or the FBI at 212-384-5000.